CAPE LAMBERT IRON ORE LIMITED ABN 71 095 047 920

NOTICE OF GENERAL MEETING

TIME: 10.00 am (WST)
DATE: 27 March 2006
PLACE: Celtic Club 48 Ord Street West Perth, WA 6005

This Notice of Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their professional advisers prior to voting.

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary on 08 9380 9555.

CONTENTS PAGE

Notice of General Meeting (setting out the proposed resolutions)

Explanatory Statement (explaining the proposed resolutions)

Glossary

Proxy Form

TIME AND PLACE OF MEETING AND HOW TO VOTE

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The General Meeting of the Shareholders of Cape Lambert Iron Ore Limited which this Notice of Meeting relates to will be held at 10,00gm (WST) on 27 March 2006 at:

Celtic Club 48 Ord Street West Perth, WA 6005

YOUR VOTE IS IMPORTANT

The business of the General Meeting affects your shareholding and your vote is important.

VOTING IN PERSON

To vote in person, attend the General Meeting on the date and at the place set out above.

VOTING BY PROXY

To vote by proxy, please complete and sign the proxy form enclosed and:

send the proxy form by post to Cape Lambert Iron Ore Limited, 18 Oxford Close, $(\alpha)$ Leederville, Western Australia, 6007; or
$(b)$ send the proxy form by facsimile to the Company on facsimile number (08) 9380 9666,

so that it is received not later than 10.00am (WST) on 25 March 2006.

Proxy forms received later than this time will be invalid.

NOTICE OF GENERAL MEETING

Notice is given that the General Meeting of Shareholders of Cape Lambert Iron Ore Limited will be held at 10.00am (WST) on 27 March 2006 at the Celtic Club, 48 Ord Street, West Perth, Western Australia.

The Explanatory Statement to this Notice of Meeting provides additional information on matters to be considered at the General Meeting. The Explanatory Statement and the proxy form are part of this Notice of Meeting.

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the General Meeting are those who are reaistered Shareholders of the Company on 10.00am at 25 March 2006.

Terms and abbreviations used in this Notice of Meeting and Explanatory Statement are defined in the Glossarv.

AGENDA

$\mathbf{1}$ . RESOLUTION 1 - ELECTION OF MR EMILIO DEL FANTE

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution:

"That, Mr Emilio Del Fante, having been appointed as an additional Director of the Company on 17 January 2006, in accordance with clause 12.4 of the Company's Constitution, be elected as a Director of the Company."

$2₁$ RESOLUTION 2 - ELECTION OF MR BRIAN MAHER

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution:

"That, Mr Brian Maher, having been appointed as an additional Director of the Company on 20 December 2005, in accordance with clause 12.4 of the Company's Constitution, be elected as a Director of the Company."

$\mathbf{3}$ . RESOLUTION 3 - AMENDMENT TO CONSTITUTION

To consider and, if thought fit, to pass, with or without amendment, the following resolution as a special resolution:

"That, for the purposes of Sections 136 and 231 of the Corporations Act and for all other purposes, the Constitution of the Company be amended with immediate effect by inserting the words "including, but not limited to, distributing to Shareholders securities of any other body corporate and for the Shareholders to be bound by the Constitution of that body corporate" after the words "in any way" in clause 9.2 of the Constitution of the Company."

Short Explanation: If Resolution 4 is passed, Shareholders of the Company will become shareholders of another public company. Under the Corporations Act, a person must agree to become a member of a company. Agreement may be inferred if there is a provision in the Company's Constitution to that effect. Under the Corporations Act, the Company must seek Shareholder approval by special resolution to modify the Company's Constitution. Please refer to the Explanatory Statement for details.

RESOLUTION 4 - APPROVAL FOR AN EQUAL REDUCTION OF CAPITAL $\overline{\mathbf{4}}$ .

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution:

"That, subject to the passing of Resolution 3, for the purposes of ASX Listing Rule 11.4, Section 256C of the Corporations Act 2001 and for all other purposes, approval is given for:

the Company to dispose of a number of mining tenements to $(a)$ International Goldfields Limited, a wholly owned subsidiary of the Company, in consideration for the issue of 35,000,000 fully paid ordinary shares in the capital of International Goldfields Limited (IGL Shares); and
$(b)$ subject to International Goldfields Limited raising at least \$4,000,000 by the issue and allotment of IGL Shares and receiving conditional approval to list on the official list of Australian Stock Exchange Limited. the net assets of the Company be reduced by the Company making a pro rata in specie distribution of at least 28,000,004 IGL Shares to all holders of ordinary shares in the Company on the record date on the terms and conditions set out in the Explanatory Statement accompanying this Notice."

Under the Corporations Act, the Company must seek Short Explanation: Shareholder approval by ordinary resolution to an equal reduction of capital. Please refer to the Explanatory Statement for details.

Voting Exclusion: The Company will disregard any votes cast on this resolution by a party to the transaction to acquire the asset and any associates of those persons.

DATED: 24 FEBRUARY 2006

BY ORDER OF THE BOARD

Tony Sage CHAIRMAN

Voting Exclusion Note:

Where a voting exclusion applies, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote in accordance with the directions on the proxy form or it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

EXPLANATORY STATEMENT

This Explanatory Statement has been prepared for the information of the Shareholders of the Company in connection with the business to be conducted at the General Meeting to be held at 10.00am (WST) on 27 March 2006 at the Celtic Club. 48 Ord Street. West Perth. Western Australia.

This purpose of this Explanatory Statement is to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions in the Notice of Meeting.

$\mathbf{1}$ . RESOLUTIONS 1 AND 2 - ELECTION OF DIRECTORS

In accordance with clause 12.4 of the Company's Constitution, as Messrs Emilio Del Fante and Brian Maher were appointed by the Board as Directors of the Company since the last annual general meeting, they are now required to retire and offer themselves for re-election.

Emilio Del Fante

Mr Del Fante has significant experience in the Western Australian mining industry and for the last 16 years has operated Corporate Tenement Services, a successful mining tenement and advisory business. Mr Del Fante has been involved in all aspects of mining title management and has a comprehensive understanding of the discipline and timely action required to meet the statutory requirements of the Mining Act 1978 as well as maintaining joint venture obligations between parties.

Since 1993 he has dealt with more complicated issues relating to various processes, dealings and challenges under the Native Title Act 1993.

Over his vears as a consultant in the resource industry Mr Del Fante has also gained exposure and experience to many corporate issues such as new ASX listings, various company structures and corporate dealings between public and private companies.

Brian Maher

Mr Maher has over 40 years experience in the mining industry, covering both underground and open cut operations, as a miner, supervisor, mining engineer, mine manager consultant, contractor and managing director. He has worked throughout the world, including Australia, Liberia, Guyang and the Philippines, He spent over 12 years in the iron ore industry.

Mr Maher has worked in senior management positions with leading mining and engineering companies throughout the world including Hamersley Iron, Broken Hill South, Griffin Coal, Thyssen Mining Construction, Lameo Iron Ore, Kinhill Engineers, Linden Mining, Minproc Engineers and Nissho Iwai Mineral Sands.

As a consultant to the mining industry, Mr Maher specialises in providing strategic advice to resource companies in the areas of management practices, mine development and production, and assisting companies through the transition from the exploration to the production stage.

Mr Maher has a Bachelor of Mining Engineering from the University of Melbourne, and is a fellow of both The Australian Institute of Mining and Metallurgy and The Institution of Mining and Metallurgy.

S:\International Goldfields Ltd\Operation\General Meefings\2006\060223 Notice of Meefing 270306 print version FINAL.doc

$\overline{2}$ RESOLUTION 3 - AMENDMENT TO CONSTITUTION

Resolution 4 contemplates a reduction in the share capital account of the Company by:

the Company disposing of its Gold Assets to IGL (a wholly owned subsidiary $(a)$ of Cape Lambert) in consideration for IGL Shares; and
subject to IGL receiving conditional approval to list on the official list of ASX $(b)$ (and satisfaction of other conditions set out in Section 3.1 of this Explanatory Statement), at least 80% of the IGL Shares held by the Company will be distributed to Shareholders on the Record Date by way of an in specie capital distribution.

A shareholder of a company limited by shares (Company 1), can become a member of another company (Company 2) by taking an allotment of shares from Company 1. To become a member of Company 2 following allotment requires a prior agreement between Company 1 and the allottee.

The requirement for prior agreement can be satisfied if the constitution of Company 1 provides that should Company 1 participate in a capital reduction and as consideration, distribute shares in another company to their shareholders, those shareholders implicitly agree to become shareholders in the other company. This provision of the constitution would be subject to shareholder approval of the capital reduction, with shareholders being fully informed of the transaction and the company they are to receive shares in.

Clause 9.2 of the Constitution provides that the Company may reduce its share capital, any capital redemption reserve fund or any share premium account in any way, subject to the Corporations Act and the Listing Rules.

In the interests of clarity, the Directors consider it necessary to amend the Constitution to specifically provide for a reduction in capital by way of a distribution of shares in another company, in this case, IGL. The proposed amendment to the Company's Constitution is required to give effect to the proposed in specie share distribution contemplated pursuant to Resolution 4.

$\overline{\mathbf{3}}$ . RESOLUTION 4 - REDUCTION OF CAPITAL

$3.1$ Background and Overview of the Proposal

Cape Lambert, through its recent acquisition of Mt Anketell (the owner of the Cape Lambert Iron Ore Project) intends to focus its activities on its iron ore interests. To give effect to this, and as announced to ASX on 17 January 2006, the Company proposes to restructure its mineral exploration and production assets through the distribution of its Gold Assets to a 100% wholly owned subsidiary, IGL, in consideration for the issue of 35,000,000 IGL Shares to the Company. The Sacu aold/copper project in Romania will be retained by the Company.

IGL will seek a listing on the official list of ASX through an initial public offerina of 20,000,000 IGL Shares at 20 cents per IGL Share to raise up to \$4,000,000

Subject to IGL receiving conditional approval to list on the official list of ASX, IGL will distribute 80% of its shareholding in IGL to Cape Lambert Shareholders. The proposed distribution will give Cape Lambert Shareholders approximately a 51% equity interest (collectively) in IGL (post Capital Raising) and assuming \$4,000,000 is raised pursuant to the Capital Raising).

Accordingly, the Company intends making a pro rata distribution of approximately 28,000,004 IGL Shares (subject to roundina) to Cape Lambert Shareholders on the basis of 1 IGL Share for every 8.8 Shares held on the Record Date frounded up to the nearest whole Share).

To give effect to the disposition of the Gold Assets to IGL, the Company and IGL have entered into an agreement (Sale Agreement) pursuant to which the Company has agreed to sell and IGL has agreed to purchase, the Gold Assets. The Sale Agreement is subject to all consents from regulatory authorities and third parties required by law or pursuant to contracts for the disposition of the Gold Assets from the Company to IGL being obtained.

If the Sale Agreement becomes unconditional, IGL will become entitled to all the Company's right, title and interest in the Gold Assets and will issue 35,000,000 IGL Shares to the Company (Consideration Shares). The Company's remaining mining tenements will primarily relate to iron ore.

Subject to the following:

$(a)$ Shareholders of the Company approving the in specie distribution of IGL Shares pursuant to Resolution 4:
$(b)$ IGL completing the Capital Raising;
IGL receiving conditional approval to list on ASX subject to conditions $\left( \bigcirc \right)$ satisfactory to IGL; and
compliance by the Company and IGL in all respects with the Corporations $(d)$ Act and the ASX Listing Rules in respect to the transaction;

80% of the Consideration Shares held by the Company will be distributed to Shareholders in the Company pursuant to the equal capital reduction. The balance of the Consideration Shares (being approximately 7,000,001 IGL Shares) will be retained by the Company.

Pursuant to the equal reduction of capital, Cape Lambert Shareholders will be entitled to approximately 1 IGL Share for every 8.8 Cape Lambert Shares held on the Record Date (as defined in Section 3.5) (rounded up to the nearest whole number) (Return Shares).

An pro-forma statement of financial position of IGL as at 31 January 2006 is contained in Appendix A. This shows the financial position of IGL as a stand alone entity to the Company as it would be following completion of the transaction and completion of the Capital Raising by IGL assuming \$4,000,000 is raised.

$3.2$ Effect of Proposed Equal Capital Reduction on the Company

If the equal reduction is approved, the net assets of the Company will be reduced by \$5,600,001. The Reduction Amount (as defined in Section 3.5) is the book value of the Return Shares at their issue price of \$0.20 each. The total book value of the capital reduction is \$5,600,001.

A pro-forma statement of financial position of the Company as at 31 December 2005 is contained in Appendix B which shows the financial impact of the capital reduction on the Company (assuming that no further Shares are issued).

$3.3$ Effect of Proposed Equal Reduction on Shareholders in the Company

The effect of the proposed equal reduction is that Shareholders in the Company will receive a pro-rata distribution in specie of IGL Shares on the basis of 1 IGL Share for every 8.8 Cape Lambert Shares held on the Record Date (rounded up to the nearest whole number).

As at the date of this Notice, the structure of the Company and IGL is as follows:

Immediately after the equal reduction resolution is passed, the distribution of IGL Shares is completed and the Capital Raising is completed (assuming \$4,000,000 is raised pursuant to the Capital Raising) the structure of the Company and IGL will be as follows:

Notes:

¹ This excludes any IGL Shares acquired by Shareholders under the Capital Raising.

² If more than \$4,000,000 is raised pursuant to the Capital Raising, it will dilute each Shareholder's interest in IGL.

$3.4$ Advantages and Disadvantages of the Proposal

The principal advantages and disadvantages to Shareholders of the proposed equal reduction are as follows:

Advantages $(a)$

All Shareholders retain an interest in the Company's Gold Assets through their individual pro rata shareholdings in IGL.
All Shareholders retain their current percentage ownership interest in the capital of the Company.
The separation of the Gold Assets allows the Company to specifically focus on iron ore activities and IGL to specifically focus on gold activities.
Future capital raising should be more achievable by each individual entity as the focus of the funding will be on either gold or iron ore.
The value of the Company's aold operations will be more fully reflected in a separate vehicle to the iron ore operations.
All Shareholders are able to participate in the ownership of IGL prior $\bullet$ to IGL undertaking an initial public offering and listing on ASX. Full details relating to IGL and its operations are outlined below.
The Company will retain a 50% interest in the operating profits of Mt Ida's Meteor, Whinnem, Baldock and Timoni ore bodies which will provide the Company with the opportunity to realise significant cash receipts. Further details in respect to this permitted encumbrance are outlined in Section 3.9.2.

Disadvantages $(b)$

There is no guarantee that the IGL Shares will increase in value.
Shareholders may incur additional transaction costs if they wish to dispose of the new investment in IGL (ie brokerage).
There is a taxation consequence in respect of the distribution of the IGL Shares to the Shareholders. Details of the general taxation effect of the transaction are set out in Section 3.12 of this Explanatory Statement.

$3.5$ Additional Important Information for Shareholders

In accordance with Section 256C of the Corporations Act and the ASX Listing Rules, the Company provides the following information to Shareholders:

the capital reduction is conditional upon conditional approval being given $(a)$ by ASX to IGL to be admitted to the official list of ASX.

To be admitted to the official list of ASX, IGL is required to comply with the requirements of Chapters 1 and 2 of the ASX Listing Rules. This includes the following requirements:

${i}$ IGL's constitution being consistent with the ASX Listing Rules;
the issue of a prospectus by IGL. The Prospectus will be lodged at $(ii)$ the ASIC in the near future:
the spread of shareholders of IGL being at least 400 holders having (iii) parcels with a minimum value of \$2,000; and
the net tangible assets of IGL being at least \$2,000,000 at the time $(iv)$ of admission of IGL to the official list of ASX. Following the Capital Raising (assuming a raising of \$4,000,000), IGL will have estimated net tangible assets of \$10.6 million;
the capital structure of the Company as at the date of this Notice is: $(b)$

Number of Shares	Number of Options
249,164,530	240,221,805

¹ The Company has the following options on issue:
136,671,805 options exercisable at \$0.30 each on or before $\left{ i\right}$ 31 October 2008:
$(ii)$ 50,000,000 options exercisable at \$0.835 each on or before 31 October 2009;
$(iii)$ 40,000,000 options exercisable at \$0.40 each on or before 31 October 2010:
$(iv)$ 550,000 options exercisable at \$0.45 each on or before 22 October 2008:
500,000 options exercisable at \$0.39 each on or before $(v)$ 9 February 2009; and
12,500,000 options exercisable at \$0,30 each on or before $[v]$ 31 October 2008.
The capital structure of IGL as at the date of this Notice is: $(C)$

Number of IGL Shares	Number of IGL Options

the capital structure of IGL after the issue of IGL Shares to the Company $(d)$ pursuant to the Sale Aareement will be:

Number of IGL Shares	Number of IGL Options
35,000,005	NII

$(e)$ the capital structure of IGL after the distribution of IGL Shares to Cape Lambert Shareholders pursuant to this proposed eaual reduction and after completion of the IPO (assuming \$4,000,000 is raised pursuant to the Capital Raisina) will be:

Number of IGL Shares	Number of IGL Options
55,000,005	7,000,0001

IGL Options to be issued to IGL Directors and advisors on Note 1: successful completion of the Capital Raising.
the Record Date will be 5.00pm WST on that date which is 5 business days $(f)$ after Shareholder approval is obtained;
the share capital of the Company as at the Record Date will be reduced $(g)$ by the dollar amount of the book value of the Return Shares (Reduction Amount);
$(h)$ the Return Shares will be that number of IGL Shares to be distributed on a pro-rata basis to all holders of ordinary shares in the capital of the Company on the Record Date by applying the formula of 1 IGL Share for every 8.8 Cape Lambert Shares held (rounded up to the nearest whole number):
the Return of Capital will be effected by a pro-rata distribution of the Return $\left($ i Shares in specie proportionately to all of the Company's Shareholders:
${i}$ registered as such as at 5.00pm WST on the Record Date; or
entitled to be reaistered as a Shareholder in the Company by $(ii)$ virtue of a transfer of Shares executed before 5,00pm WST on the Record Date and lodged with the Company at that time;
in accordance with ASX Listing Rule 7.22.3 all Options on issue in the $\prod$ Company will have their exercise price per Option reduced by the same amount as the Reduction Amount per Share: and
the IGL Shares distributed to Shareholders will be subject to a 2 month $(k)$ escrow restriction from the date of issue. This means that Shareholders will not be permitted to sell their IGL Shares for a period of 2 months from the time of issue.

$3.6$ Overseas Shareholders

The distribution of the IGL Shares to the Company's Shareholders under the reduction of capital will be subject to the legal and regulatory requirements in their relevant iurisdictions. If, in the opinion of the Directors, the reaujrements of any jurisdiction where a Shareholder is resident restricts or prohibits the distribution of IGL Shares or otherwise imposes on the Company an undue burden, the IGL Shares to which the relevant Shareholders are entitled will be sold by the Company on behalf of those Shareholders as soon as practicable after the Record Date. The Company will then account to the relevant Shareholders for the net proceeds of sale after deducting the costs and expenses of the sale. The net proceeds of sale to such Shareholders may be more or less than the notional dollar value of the return of capital as set out in this Explanatory Statement.

$3.7$ Details of the Resolution

ASX Listing Rule 11.4

Pursuant to ASX Listing Rule 11.4, a listed entity must not, without shareholder approval, dispose of a major asset if, at the time of the disposal, it is aware that the person acquiring the asset intends to issue or offer securities with a view to becoming listed.

Cape Lambert proposes disposing of the Gold Assets to IGL following which, IGL will complete the Capital Raising and seek a listing on ASX. Accordingly, Shareholder approval pursuant to ASX Listing Rule 11.4 is required.

Section 256C of the Corporations Act

The proposed reduction of capital by way of an in specie distribution to Shareholders is an equal capital reduction. Under Section 256C of the Corporations Act, this must be approved by an ordinary resolution passed at a general meeting of the Company.

Under Section 256B of the Corporations Act, the Company may only reduce its capital if it:

is fair and reasonable to Shareholders as a whole: $(a)$
does not materially prejudice the Company's ability to pay its creditors; (a) and
is approved by Shareholders in accordance with Section 256C of the $(b)$ Corporations Act.

The Directors believe that the capital reduction is fair and reasonable to Shareholders for the reasons set out throughout this Explanatory Statement and that the capital reduction will not prejudice the Company's ability to pay its creditors.

Directors' Interests and Recommendations $3.8$

Set out below is a table which indicates the securities in which the Directors have an interest prior to the capital reduction and the number of IGI Shares they are likely to have an interest in if Resolution 4 is passed and implemented:

Director	Cape Lambert Shares	Cape Lambert Options	Number of IGL Shares each Director is likely to receive if Resolution 4 is passed
Mr Sage	11,930,075	9,960,000	1,355,690
Mr Turner	544,004	1,500,000	61,819
Mr Maher	Nil	1,000,000	NIL
Mr Del Fante	Νil	Νil	NIL

After considering all relevant factors, the Directors recommend the Company's Shareholders vote in favour of Resolution 4 for the following reasons:

$(a)$ after a full and proper assessment of all available information they believe that the proposed transaction is in the best interests of the Company's Shareholders: and
in the opinion of the Directors, the benefits of the proposed transaction (a) outweigh its disadvantages as referred to in Section 3.4.

$3.9$ Information on IGL

$3.9.1$ Background

IGL is a wholly owned subsidiary of the Company incorporated on 31 January 2006. It is an unlisted public company.

IGL presently has no business operations other than by virtue of the proposed acquisition of the Gold Assets from the Company.

The in specie distribution of IGL Shares held by the Company is subject to IGL raising additional capital pursuant to the Capital Raising and receiving conditional approval from ASX to list on ASX. IGL will then continue with the exploration and production of the Gold Assets.

IGL will initially focus on the Company's Mt Ida project including the Meteor, Whinnem, Baldock and Timoni ore bodies and the tenements subject to a Farmin and Joint Venture Agreement with Mines and Resource Australia Pty Ltd (MRA), the Evanston gold project and other non core gold assets. IGL will be specifically gold focused having an experienced management team with relevant experience in aold exploration and development.

A summary of the projects comprising the Gold Assets and information in respect to the IGL Board is contained below. Copies of the Prospectus will be available on the Company's web site at www.internationalgoldfields.com.au during mid March 2006 and Shareholders are encouraged to read this in its entirety.

$3.9.2$ Details of the Gold Assets to be transferred by Cape Lambert to IGL

Mt Ida Project

The Mt Ida Project covers approximately 490 square kilometres of around $(a)$ over a 70km strike extent along the northern portion of the Mount Ida (Vlarring) areenstone belt.
The Mt Ida Project is covered by a Farmin Joint Venture Aareement with $(b)$ MRA, a wholly owned subsidiary of French mining company Cogema Group.
$(C)$ The agreement relates to the Mt Ida Project, however, IGL will retain the JORC Compliant Baldock, Whinnen and Meteor resources and the historical Timoni mine. As part of this agreement. MRA will spend \$7,500,000 over 5 years on gold exploration and in return will earn an interest of 51% of all gold found at the Mt Ida Proiect. MRA must spend a minimum of \$1,000,000 on exploration expenditure before it can withdraw.

Meteor, Whinnem, Baldock and Timoni ore bodies

The estimated gold resource (JORC compliant) contained within Mt Ida's $(a)$ Meteor, Whinnem, Baldock and Timoni ore bodies is currently 110,650 ounces of gold averaging 24 g/tonne.
$(b)$ Mining of these ore bodies is expected to commence in the second quarter of 2006.
Milspan Holding Pty Ltd (Milspan) has agreed that the joint venture $(C)$ arrangement previously announced by the Company on 4 January 2006 will no longer be implemented with the development and mining of this part of Mt Ida now to be undertaken and funded by IGL.
$(d)$ Pursuant to the Sale Agreement, Cape Lambert will retain a 50% interest in the operating profit from these ore bodies pursuant to a permitted encumbrance over these tenements. The permitted encumbrance refers to the interest retained by CFE in the Meteor, Whinnem, Baldock and Timoni ore bodies being a 50% interest in:
the gross proceeds of sale received by IGL during each quarter from the sale of gold produced on the tenements less all costs associated with the smelling, refining, freight (associated with the transport of ore from the tenements to the treatment plant), assaying, sampling, financing (associated with the project), taxes (other than taxes measured by income), excise duties and other charges levied by any aovernment authority as a result of the production and or sale of gold

which is payable by IGL to CFE.

Evanston Project

$(a)$ The Evanston Project area is located in the Marda-Diemals greenstone belt approximately 115km north of Bullfinch on the Bullfinch-Evanston Road.

The Evanston tenements contain a number of prospects over 570 square $(b)$ kilometres which lie between a major reaional structure, the Evanston Shear, and the intrusive Deception Hill porphyry and Pigeon Rock granite.
$|C|$ The estimate gold resource is currently 123,000 ounces of gold at an average grade of 2.3 g/tonne.

St Ives Project

The St. Ives project is situated approximately 16 km southeast of Kambalda on the southeastern shore of Lake Lefroy in the Eastern Goldfields region of Western Australia. Tenements cover approximately 97 square kilometres and are all held 100% by IGL.

The project is located within the southern portion of the Archaean Norseman – Wiluna greenstone belt adjacent to Goldfields Australia's St Ives gold mining operations and to the east of the Boulder-Lefroy fault. The area comprises a succession of mafic and ultramafic volcanics and intrusives with thin, intercalated sedimentary units. Monzogranitic stocks also intrude the sequence.

The Kambalda district hosts multi-horizon gold and basal contact ultramafic nickel mineralisation. The Company reaards the St Ives Project as prospective for aold and nickel mineralisation and have identified several positive characteristics and favourable exploration criteria for future target generation, including:

$(a)$ potential doleritic & sheared porphyry intrusives associated with auartz veinina.
$(b)$ pressure shadow zones or flexure zones surrounding granite plutons,
close proximately to a highly endowed first order structural corridor, the $(C)$ Boulder Lefroy Fault,

Telfer Project

The Telfer Project is located in the Pilbara Mineral Field and centered approximately 15km SE of the mining town of Telfer in the Paterson Range. The project consists of one Exploration Application ELA45/2446 held 100% by the Company.

The tenement formerly owned by Mt Burgess is situated immediately south of a series of mining leases containing the Telfer and O'Callaghan deposits and approximately 8km north of the Big Tree deposit. The Proterozoic stratigraphy is viewed as having the potential to host gold and/or base metal mineralization. Geological mapping by previous holders has confirmed the presence of a regional anticline within ELA45/2446 which is interpreted to be the strike continuation of the Telfer Dome axis.

The region hosts significant low grade bulk tonnage sheeted vein and stockwork quartz-pyrite-Au±Cu systems at Main Dome & West Dome (Telfer) and Big Tree, as well as smaller AutCu skarn deposits at Minyari and low order disseminated AutCu greisens at 17 Mile Hill.

Outcrop within the project is sporadic and the majority of the holding is covered with geolian sands. Work conducted to date, in the immediate region, has consisted of geological interpretation and mapping, reconnaissance rockchip sampling, soil sampling, magnetics and limited RC & RAB drilling.

The Company believes the area has the potential for the discovery of significant aold and base metal mineralization. The mineralization in the Telfer district mainly comprises low grade bulk tonnage sheeted vein and stockwork guartz-pyritegoldcopper systems and stratabound gold-copper systems. The preferred exploration target is Telfer style Au/Cu mineralization.

Cardinia Project

The Cardinia Project comprises one Prospecting License P37/6419 and is situated approximately 35 kilometres east of Leonora within the Malcolm district of the Mt Maraaret Mineral Field.

The tenement is located within a greenstone sequence bounded by the NW trending Keith Kilkenny, to the west, and Mt Morgan Tectonic zone (a splay off the Southern Laverton Tectonic Zone) to the east. Locally the tenement covers a package of sub-cropping or outcropping basalts, dolerites/gabbros and felsic pyroclastic rocks and the historic Brilliant set of workings. Record production from these workings was 38t @ 3.66 g/t.

Gold mineralisation tends to occur in mafic sequences associated with quartz reefs in dilational fault zones with little host rock alteration. The Company believes this project will be of strategic value in the future.

Sophie Downs Project

The Sophie Downs Project is situated in the Halls Creek region of the East Kimberley region of Western Australia, located in the eastern portion of the Kimberley Mineral Field. The tenement P80/1474 is held 100% by the Company and reagrated as highly prospective for gold, base metals and rare earth elements.

Jackson Project

The Jackson project is located approximately 135km north of Southern Cross on the Bullfinch-Evanston Road in the Marda-Diemals greenstone belt. It is contiguous with the south-western portion of the Evanston Project.

The project consists of 2 Exploration Licenses and 5 Prospecting Licenses that are joint ventured to and managed by Polaris Metals. Polaris must spend \$250,000 on exploration within 2 years of grant of the tenements to earn 75% interest. The Company retains a 25% interest but must contribute on a pro rata basis or dilute once the first \$250,000 has been spent.

There is a concentration of historic gold mines within the project area that constitute the Mount Jackson Group of mines, the largest producer being the Hazel Merle which produced approximately 20,000 ounces of gold at a grade of 20g/t. Gold mineralisation in the historic workings is generally associated with narrow high arade auartz veins alona mafic-ultramafics contacts.

British Hill Project

The British Hill project is situated 75km south-southeast of Southern Cross and comprises a package of tenements managed by Polaris Metals and the Company. The British Hill North tenements P77/3341 - 3346 are wholly owned and managed by the Company. The nine remaining tenements are managed by joint venture partner Polaris Metals NL. Polaris can earn 75% interest by completing a prefeasibility study of a +25,000oz Au per annum aold mine.

The prospect covers two separate tenement blocks with the main focus in the southern block of five contiguous granted Prospecting Licenses covering a 3km zone of gold mineralization. The mineralisation has surface expression as a line of soil aold anomalies on a ridge of lateritic duricrust, quartzite and ferruginous chert.

referred to as British Hill. The Company believes the full potential of the British Hill project remains unrecognized and has prospects that have not been fully explored.

Clampton Project

The Clampton project is situated approximately 150km north of Southern Cross in the Marda-Diemals Greenstone Belt on the western flank of the Evanston project.

The project consists of two Exploration Licenses E77/862 and E77/864 managed by Polaris Metals. Eclispe Minerals Pty Ltd (subsidiary of Polaris Metals) has the right to earn an 80% interest in the tenements over a period of not more than 3 years from grant of the tenements by expenditure of \$500,000.

The area is largely covered by geolean sands and contains some gossans associated with metasediments and volcanics. Past lateritic reaplith sampling has identified numerous untested gold geochemical anomalies.

The project surrounds Polaris Metals Yarbu project and the Company believes the joint venture with Polaris is the best way to advance the project.

Bullabullina Project

The Bullabulling project comprises one Prospecting License, P15/4531. The project is located approximately 25km west of Coolgardie within the Gibraltar locality of the Coolgardie Mineral Field, south of the old Resolute Bullabulling mine site.

The Company has entered into a sale agreement with Charles George Chitty on the tenement whereby Charles Chitty has an option to purchase the tenement with the Company retaining a royalty. The option expires on 28 April 2006.

Regionally the geological characteristics are dominated by a narrow corridor of sheared, intercalated westerly dipping mafic to ultramafic rocks with sedimentary areenstones to the west.

The Bullabulling region is a well-mineralised area that has demonstrated primary gold deposits in all sheared lithologies. Sheared sediment/mafic and ultramafic contacts and dilation zones associated with thrust faulting are deemed suitable primary host features for economic gold mineralisation in the Bullabulling district.

Lord Byron Project

The Lord Byron project comprises Exploration License E39/970 covering 86 square kilometers of around situated 70km southwest of Laverton in the Mt Margaret Mineral Field of Western Australia. It is prospective for gold and base metals and is surrounded by historic gold and base metal mines and a number of inferred gold and nickel resources.

Lord Byron project is managed by Cresent Gold with the Company retaining a 15% free carry interest to bankable feasibility study within 7 years of grant of the tenement. Cresent must spend \$300,000 in 3 years and a minimum of \$75,000 before withdrawing.

Bali High Project

The Ball Highi Project is situated in the Capricorn Range approximately 80km WSW of Paraburdoo in the southwestern fringe of the Pilbara Region, northwest Western Australia. The project consists of one Exploration License E08/1372 and is prospective for gold, copper, silver, PGE and base metals and contains numerous geochemical gold anomalies.

The Company has an agreement with Global Uranium who manage the project whereby the Company retains a 10% free carry interest through to completion of a decision to mine.

Mount Dimer Project

The Mount Dimer project is located 110km north of Southern Cross in the Marda-Diemals Greenstone Belt, southeast of the Evanston project. Mt Dimer consists of an Exploration License, E77/1106, covering 60 square kilometres in which the Company holds a 10% free carry interest to the completion of a bankable feasibility study.

The project is prospective for gold, nickel and silver and lies immediately northwest of Mount Dimer mine which produced 550,000 for 126,231 ounces of gold and 189.084 ounces of silver.

MI Macmahon Project

The Mt. McMahon Project is located within the Ravensthorpe Range in the Phillips River Mineral Field, 5km northeast of the town of Ravensthorpe. The project consists of a single Prospecting License P74/247 (106Ha).

The Company retains a 1% gross royalty on all product from the tenement and has buy back rights to 70% should capital cost of development exceed \$20 million.

The project covers a small but highly prospective area with historical production of copper and gold from quartz filled shears hosted by quartz feldspar biotite schist. The majority of the holding is vacant crown land although part of the tenement covers cleared private land (wheat farming).

$3.9.3$ IGL Board

The board of IGL will comprise of the following (after completion of the in specie distribution of Shares and listing on ASXI:

Mr Tony Sage -Executive Chairman (B.Com, FCPA, CA, FTIA)

Mr Sage has in excess of 21 years experience in the fields of corporate advisory services, funds management and capital raising. Mr Sage is based in Western Australia and has been involved in management and capital raising. Mr Sage is based in Western Australia and has been involved in the management and financina of listed mining companies for the last 12 years.

Mr Sage is the Executive Chairman of the Company and Non Executive Chairman of Canadian listed NFX Gold Inc.

Mr Nap Mayer - Non-Executive Director (B.Eng (Mining), Dip Bus Admin)

Mr Mayer holds a Bachelor Engineering (Mining) degree from the University of the Witwatersrand in South Africa and Diplomas in Business Administration from the University of South Africa and Harvard Business School in the United States of America. He is the holder of a South African Mine Managers Certificate and is a member of the Mine Managers Association of South Africa as well as the South African Institute of Mining and Metallurgy. During his career he served the mining industry at all levels and has experience and an understanding of all facets of the mining organisation.

During his career of 40 years in the mining industry he served on the boards of both publicly listed as well as private unlisted companies.

Mr Charles Mostert - Non-Executive Director (B.Com (Hons), MBL, Certificate in Mining Taxation)

Mr Mostert has over 28 years experience in the mining industry. His career in the South African mining industry included 3 years with Gold Fields of South Africa, 17 years with Anglo American Corporation and 3 years with Durban Roodepoort Deep.

Since moving to Australia in 1998, he has been actively involved in the resources industry serving on the boards of a number of listed companies including Hararayes Resources NL, Dome Resources NL and Crown Diamonds NL. He is currently a director of Continental Goldfields Limited, AXG Mining Ltd and Nare Diamonds Limited and is a founding director of Omega Partners Pty Ltd.

Mr Tim Turner - Non Executive Director (B.Bus. FCPA. FTIA)

Mr Turner specialises in business structuring, corporate and trust tax planning and has extensive experience in new ventures, capital raising, and general business consultancy. As the senior partner of accounting/advisory firm Hewitt Turner & Gelevitis, Mr Turner heads the audit assurance division, and is responsible for all audit enaggements.

Mr Turner is a Reaistered Company Auditor, fellow of CPA Australia and the Taxation Institute of Australia. Mr Turner is the non-executive director and company secretary of Cape Lambert Iron Ore Limited.

$3.9.4$ Information concerning IGL Shares

IGL Shares are not currently listed for quotation on any stock exchange. It is the intention of the Board of IGL to apply for auotation of IGL Shares on ASX upon successful completion of the Capital Raising.

A summary of the more significant rights attaching to the IGL Shares is set out This summary is not exhaustive and does not constitute a definitive below. statement of the rights and liabilities of the IGL Shareholders.

Full details of the rights attaching to the IGL Shares are set out in IGL's constitution, a copy of which is available on request.

Voting Rights

Subject to any rights or restrictions for the time being attached to any class or classes of Shares (at present there are none), at meetings of shareholders of IGL:

each shareholder entitled to vote may vote in person or by proxy, attorney $(a)$ or representative:
on a show of hands, every person present who is a shareholder or a proxy, $(b)$ attorney or representative of a Shareholder has one vote; and
on a poll, every person present who is a shareholder or a proxy, attorney or $\left( \bigcirc \right)$ representative of a shareholder shall, in respect of each fully paid share held by him, or in respect of which he is appointed a proxy, attorney or representative, have one vote for the share, but in respect of partly paid Shares, shall have such number of votes as bears the same proportion

which the amount paid (not credited) is of the total amounts paid and payable (excluding amounts credited).

Rights on Winding Up

Subject to the rights of holders of shares with special rights in a winding up (at present there are none), on a winding up of IGL all assets that may be leadly distributed among members will be distributed in proportion to the number of fully paid shares held by them (and a partly paid share is counted as a fraction of a fully paid share eaual to the amount paid on it, divided by the total issue price of the share).

Transfer of Shares

Subject to the Constitution of the Company, the Corporations Act 2001, and any other laws and ASTC Settlement Rules and ASX Listing Rules, shares are freely Shareholders should note that the IGL Shares distributed to transferable. Shareholders will be subject to a 2 month escrow restriction from the date of issue. This means that Shareholders will not be permitted to sell their IGL Shares for a period of 2 months from the time of issue.

Future Increases in Capital

The allotment and issue of any shares is under the control of the Directors. Subject to restrictions on the allotment of shares to Directors or their associates, the ASX Listing Rules, the Constitution of the Company and the Corporations Act 2001, the Directors may allot or otherwise dispose of shares on such terms and conditions as they see fit.

Variation of Rights

Under the Corporations Act 2001, IGL may, with the sanction of a special resolution passed at a meeting of shareholders vary or abrogate the rights attaching to shares. If at any time the share capital is divided into different classes of shares, the rights attached to any class (unless otherwise provided by the terms of the issue of the shares of that class), whether or not IGL is being wound up may be varied or abrogated with the consent in writing of the holders of three quarters of the issued shares of that class, or if authorised by a special resolution passed at a separate meeting of the holders of the shares of that class.

Dividend Rights

Subject to the rights of holders of shares issued with special, preferential or qualified rights (at present there are none), the profits of IGL which the Directors determine to distribute by way of dividend are divisible amona the holders of ordinary shares in proportion to the number of shares held by them.

$3.10$ Risk factors

On successful completion of the equal reduction, Shareholders will become shareholders in IGL and should be aware of the general and specific risk factors which may affect IGL and the value of its securities. These risk factors are outlined below.

The risk factors have been reviewed by each of the boards of directors of the Company and IGL and are considered applicable.

Exploration Success

The Gold Assets are at various stages of exploration and development, and potential investors should understand that mineral exploration and development are speculative undertakings.

There can be no assurance that IGL's exploration of its projects or any other exploration properties that may be acquired, will result in the discovery of an economic gold reserves. Even if an apparently viable resource is identified, there is no quarantee that it can be economically exploited.

Development and Operating Risks

Development of any mineral deposit will require obtaining the necessary licences or clearances from the necessary authorities which may reavire conditions to be satisfied and/or the exercise of discretion by such authorities. It may or may not be possible for such conditions to be satisfied.

The operations of IGL may be affected by various factors, including without limitation, failure to locate or identify mineral deposits, failure to achieve predicted grades in exploration and mining, difficulties in commissioning and operating plant and equipment, mechanical failure or plant breakdown, unanticipated metallurgical problems which may affect extraction costs, adverse weather conditions, industrial and environmental accidents, industrial disputes and unexpected shortages or increases in the costs of consumables, spare parts, plant and equipment.

Having only been recently incorporated, IGL does not have any operating history, although it should be noted that IGL's directors have among them significant operational experience. No assurances can be given that IGL will achieve commercial viability through the successful exploration and/or mining of the tenements.

Reserves and Resource Estimates

Reserve and resource estimates are expressions of judgement based on knowledge, experience and industry practice. Estimates which were valid when originally calculated may alter significantly when new information or techniques become available. In addition, by their very nature, resource and reserve estimates are imprecise and depend to some extent on interpretations, which may prove to be inaccurate. As further information becomes available through additional exploration and development of IGL's projects, the estimates may change. This may result in alterations to development and production plans which may, in turn, adversely affect the Company's operations.

Commodity Price Volatility and Exchange Rate Risks

To the extent that IGL is involved in mineral production the revenue derived through the sale of commodities may expose the potential income of IGL to commodity price and exchange rate risks. Commodity prices fluctuate and are affected by many factors beyond the control of IGL. Such factors include supply and demand fluctuations for precious and base metals, technological advancements, forward selling activities and other macro-economic factors.

Furthermore, international prices of various commodities including gold is denominated in United States dollars, whereas the income and expenditure of IGL are and will be taken to account in Australian currency, exposing IGL to the

fluctuations and volatility of the rate of exchange between the United States dollar and the Australian dollar as determined in international markets.

Environmental Risks

The operations and proposed activities of IGL are subject to State and Federal laws and reaulations concerning the environment. As with most exploration projects and production projects and mining operations. IGL's activities are expected to have an impact on the environment, particularly if advanced exploration or mine development proceeds. It is IGL's intention to conduct its activities to the highest standard of environmental obligation, including compliance with all environmental laws. Nevertheless, there are certain risks inherent in IGL's activities which could subject IGL to extensive liability.

Native Title and Title Risks

Interests in tenements in Australia are governed by the respective State legislation and are evidenced by the arantina of licences or leases. Each licence or lease is for a specific term and carries with it an annual expenditure and reporting commitments, as well as other conditions requiring compliance. Consequently, IGI could lose title to or its interest in tenements if licence conditions are not met or if insufficient funds are available to meet expenditure commitments.

It is also possible that, in relation to tenements in which IGL has an interest or will in the future acquire such an interest, there may be areas over which leaitimate common law native title rights of Aboriginal Australians exist. If native title rights to exist, the ability of IGL to gain access to tenements (through obtaining the consent of the relevant land owner), or to progress from the exploration phase to the development and mining phases of operations may be affected.

The directors of IGL will closely monitor the potential affect of any future native title claims involving the tenements in which IGL has or may have an interest.

Joint Venture Parties, Agents and Contractors

The Directors are unable to predict the risk of financial failure or default by a participant in any joint venture to which IGL is or may become a party or the insolvency or managerial failure by any of the contractors used by IGL in any of its activities or the insolvency or other managerial failure by any of the other service providers used by IGL for any activity.

Share Market Conditions and Security Investment

The market price of shares can fall as well as rise and may be subject to varied and unpredictable influences on the market for equities and in particular resource stocks. Neither IGL nor the directors of IGL warrant the future performance of IGL or any return on investment in IGL.

Applicants should be aware that there are risks associated with any securities investment. Securities listed on the stock market, and in particular securities of mining and exploration companies have experience extreme price and volume fluctuations and that have often been unrelated to the operating performance of such companies. These factors may materially affect the market price of the shares regardless of the company's performance.

Mineral exploration and mining are speculative operations that may be hampered by circumstances beyond the control of IGL. Profitability depends on successful exploration and/or acquisition of reserves, design and construction of efficient processing facilities, competent operation and management and proficient financial management.

Exploration by itself is a speculative endeavour, while mining operations can be hampered by force majeure circumstances and cost overruns for unforeseen events.

Competition

IGL will be competing with other companies in the resource sector many of which will have access to greater resources than IGL and may be in a better position to compete for future business opportunities. There can be no assurance that IGL can compete effectively with these companies.

Economic Risks

There is a risk that the price of IGL Shares and returns to shareholders may be affected by changes in:

local and world economic conditions: $(a)$
$(b)$ interest rates:
levels of tax, taxation law and accounting practice; $\mathcal{L}$
$(d)$ aovernment leaislation or intervention; and
$(e)$ inflation or inflationary expectations.

Insurance

Insurance against all risks associated with mineral exploration production is not always available or affordable. IGL will maintain insurance where it is considered appropriate for its needs however it will not be insured against all risks either because appropriate cover is not available or because the directors consider the required premiums to be excessive having regard to the benefits that would accrue.

Reliance on Key Personnel

The loss of any one or more of the directors (in particular Mr Mayer) could have adverse impact on the performance and prospects of IGL.

Future Capital Needs and Funding

Further funding may be required by IGL to support its future activities and operations other than the Capital Raising. There can be no assurance that such funding will be available on satisfactory terms or at all. Any inability to obtain finance will adversely affect to the business and financial condition of IGL and. consequently, its performance.

Debt Risk

IGL is currently in discussions with various parties in respect to the provision of debt financing for the development of the Mt Ida Project. Should the Company enter into a debt financing agreement it will be exposed to the risks associated with the requirement to make repayments under the agreement and other risks associated with a breach any other terms included in such debt funding agreement.

$3.11$ Information on Cape Lambert post completion of the equal reduction

On completion of the equal capital reduction, the focus of the Company will be the Cape Lambert Iron Ore Project.

The details of the Cape Lambert Iron Ore Project and other relevant information is set out below:

3.11.1 Cape Lambert Iron Ore Project

The Cape Lambert Iron Ore Project is comprised of Exploration Licence Application 47/1462 and Exploration Licence Application 47/1493. Exploration Licence Application 47/1462 has an area of 223 saugre kilometres and is located in the northern coastal Pilbara reaion of Western Australia between the towns of Karratha. Roebourne and Wickham. The property is crossed by the North West Coastal Highway, gas pipeline, power transmission line and railway, and is only 10km from a suitable shipping port.

Previous Exploration

Between 1993 and 2001, Robe River Mining Company Pty Ltd (Robe River) carried out an exploration programme on the Cape Lambert iron deposit on the Project.

Activities carried out as part of this exploration programme included:

$(a)$ Aeromagnetometry;
$(b)$ Geological mapping;
$(c)$ RC drilling of 186 holes for 21,901 metres;
Diamond core drilling of 3 holes for 542 metres plus RC precollars; $(d)$
Analyses of generally 2 metre samples (for Fe, SiO₂, A1₂ O₃, TiO₂, MnO, CaO, $(e)$ P. S. MaO. K²O and Loss on lanifion!:
$(f)$ Down hole magnetic susceptibility and natural gamma ray logging;
$(q)$ Pumping tests;
$(h)$ Petrology; hole collar surveys; and
$\prod$ Down hole surveys.

Mineral test work over the period was extensive and directed towards producing exceptionally high market iron pellets as a marketable commodity.

Robe River decided not to proceed with further exploration of the Cape Lambert deposit on the grounds it was not economically feasible under the economic conditions and assumptions Robe River set at the time.

Recent Re-evaluation

A recent re-evaluation of all available data by the current owners and independent geological consultants Mackay & Schnellmann Pty Ltd (Independent Consultants) has confirmed a sianificant uparade of the indicated and inferred resources within the Project. The JORC compliant resource at the Project has been confirmed as:

$(a)$ 2.5 billion tonnes @ 30% Fe (250m depth & 25%Fe cut off)
$\left($ i 1.4bt Indicated Resource
$(ii)$ 1.1bt Inferred Resource
$(b)$ 1.2 billion tonnes @ 33%Fe (250m depth & 30%Fe cut off)
$(i)$ .67bt Indicated Resource
.53bt Inferred Resource $(ii)$

The Independent Consultants believe the deposit appears to be open to the north, west and south and also at depth so there is potential for significant upside if further drilling were necessary.

There are also a number of other higher-grade (60% - 64% Fe) target areas within the Project area.

Improved Iron Ore Market Conditions

Since Robe River relinguished the Cape Lambert Iron Ore Project, market conditions in the iron ore industry have drastically changed.

Magnetite pellets now carry a price premium due to their usefulness as a blending ore for blast furnace charging. There has also been a substantial recent price rise in the price of pellets since 1999. Australian iron ore export prices have more than doubled since Robe River held the Project, due to a greatly increased demand from Asian steel makers including China, Japan, South Korea and India.

The Project assumptions have also changed markedly, with the target analysis specifications set in 1999 (67% Fe) seen to be very high by today's standards. Iron content of approx 60% Fe is now seen to be adequate for pellet production or even direct feed to the blast furnaces, Using a very high cut off arade the previous estimated resource was approximately 255-500 million tonnes. By using a 25% cut off arade the resource increases to 2.5 billion tonnes, using a 30% cut off arade the resource is 1.2 billion tonnes.

The Directors are confident the significant upgrade in the resource (and to JORC compliance), the expansion of the nearby Cape Lambert port facility by Rio Tinto and related infrastructure (road, rail power and nearby towns), the vastly improved market conditions, together with the advances in technology and associated processing techniques will assist in the assessment of Project feasibility.

The Company has commenced a Bankable Feasibility Study of the Cape Lambert Iron Ore Project. This study is expected to take between 12-18 months to complete.

$3.11.2$ Information concerning Cape Lambert Shares

The rights attaching to the Shares in Cape Lambert will not alter. It should be noted however that the net assets of Cape Lambert will be reduced by \$5,600,001. This is set out in Appendix B to this Explanatory Statement.

For the information of Shareholders, the highest and lowest recorded sale prices of the Company's Shares as traded on ASX during the 12 months immediately preceding the date of this Explanatory Statement, and the respective dates of those sales were:

Date	Highest Price	Date	Lowest Price

3 January 2006 $$0.40$ 21 July 2005 $$0.14$

The latest available closing price of the Shares on ASX prior to the date of this Notice was \$0.35 on 23 February 2006.

The Company's Shares are not currently listed for quotation on any other stock exchange.

$3.11.3$ Disclosure to ASX

Cape Lambert, as a company whose Shares are auoted on the stock market of ASX, is a disclosing entity and, as such, is subject to regular reporting and disclosure obligations. Copies of documents lodged in relation to Cape Lambert may be obtained for a fee from, or inspected at, an office of the ASIC.

$3.12$ Taxation Implications for Cape Lambert Shareholders

$3.12.1$ Introduction

The following is a summary of the Australian taxation consequences for Cape Lambert Shareholders who receive IGL shares as a consequence of the Capital Reduction. This summary has been prepared based on previous detailed opinions provided by the advisor to Cape Lambert in respect of the ability to obtain Capital Gains Tax (CGT) Demerger Roll-over Relief under Division 125 the Income Tax Assessment Act 1997 and the potential application of section 45B of the Income Tax Assessment Act 1936 (ie. the Capital Streaming Rules).

This summary only applies to those Cape Lambert Shareholders holding their Cape Lambert shares on capital account. This summary does not purport to be a complete analysis or attempt to identify all the potential tax consequences from the proposed Capital Reduction. In this regard, the views expressed in this summary are not intended to be specific advice to Cape Lambert Shareholders. Cape Lambert recommends that all Cape Lambert Shareholders obtain specialist tax advice as to the tax consequences of the proposed Capital Reduction.

3.12.2 Australian taxation consequences for Cape Lambert Shareholders who choose Demerger Roll-over Relief

a) Application of the Australian demerger rules

Those Cape Lambert Shareholders who are considered to be residents of Australia for income tax purposes, and who hold their Cape Lambert shares on capital account, should be eligible for Demerger Roll-over Relief.

Broadly, Demerger Roll-over Relief will allow Cape Lambert Shareholders to choose to defer the CGT consequences of the CGT event that happens to their Cape Lambert shares as a result of the distribution of the IGL shares.

The income tax implications for Cape Lambert Shareholders who do not choose Demerger Roll-over Relief to apply are discussed below in the Section 3.12.3 "Australian taxation consequences for Cape Lambert Shareholders who do not choose Demerger Roll-over Relief".

b) Treatment of Capital Reduction to Cape Lambert Shareholders

The Capital Reduction will be neither assessable income nor exempt income for Cape Lambert Shareholders. However, this treatment is on the basis the Capital Reduction does not invoke the operation of the Capital Stream Rules. This is further discussed below in the Section 3.12.5 "Application of the Capital Streaming Rules".

Whilst prime facie the Capital Reduction will trigger a CGT event for the Cape Lambert Shareholders, Demeraer Roll-over Relief will enable them to choose to defer the CGT consequences of this CGT event. No capital agin or loss will arise on the Capital Reduction if Demerger Roll-over Relief is chosen.

c) CGT cost base

The CGT cost base and reduced cost base of the Cape Lambert shares and IGL shares will be determined individually by each Cape Lambert shareholder through the reasonable apportionment of the cost base of the Cape Lambert shares held immediately before the Capital Reduction between the Cape Lambert and the IGL shares held by that Cape Lambert shareholder immediately after the Capital Reduction.

The Cape Lambert Shareholders must use the anticipated or actual market values of the Cape Lambert shares and IGL shares immediately after the Capital Redcution when calculating the above apportionment. The relevant values of the Cape Lambert and IGL shares will be provided to the Cape Lambert Shareholders once the Capital Reduction has been made.

d) Subsequent disposal of the IGL shares

For the purposes of applying the CGT discount rules, each IGL share received will be deemed to have been acquired at the same time that the underlying Cape Lambert share was acquired. Certain shareholders, such as individuals and superannuation funds, who are deemed to have held their Cape Lambert shares for at least 12 months, may be entitled to discounted CGT treatment on a subsequent disposal of their IGL shares.

$3.12.3$ Australian taxation consequences for Cape Lambert Shareholders who do not choose Demerger Roll-over Relief

Cape Lambert Shareholders who do not choose Demeraer Roll-over Relief will experience similar tax consequences to those outlined above, with two exceptions:

a) If the value of the IGL shares immediately after the Capital Reduction exceeds the Cape Lambert shareholder's cost base of their Cape Lambert shares, a capital gain may arise to the Cape Lambert shareholder.
b) The Cape Lambert Shareholders are deemed to have acquired the IGL shares at the date of the Capital Reduction. This will preclude eligibility for discounted CGT treatment until the Cape Lambert shareholder has held the IGL shares for at least 12 months.

The Capital Reduction will be neither assessable income nor exempt income for Cape Lambert Shareholders who do not choose Demerger Roll-over Relief. However, this treatment is on the basis the Capital Reduction does not invoke the operation of the Capital Stream Rules. This is further discussed below in the Section 3.12.5 "Application of the Capital Streaming Rules".

$3.12.4$ Non-Resident Cape Lambert Shareholders

Cape Lambert Shareholders who are not residents of Australia will not be subject to the Australian CGT rules unless they hold (together with their associates) at least 10% (by value) of Cape Lambert or IGL shares any time within the 5 years preceding a disposal or other CGT event in relation to those shares.

Cape Lambert Shareholders holding (together with their associates) at least 10% of Cape Lambert who are not residents of Australia will not be entitled to Demeraer Roll-over Relief.

Cape Lambert should not have to account for dividend withholding tax in respect of the distribution of the IGL shares.

$3.12.5$ Application of the Capital Streaming Rules

Cape Lambert has not sought to obtain a Class Ruling from the Commissioner of Taxation (the Commissioner) in respect of the proposed Capital Reduction.

Whenever a company undertakes a return of capital to its shareholders, it is necessary to consider the application of the Capital Streamina Rules. Broadly, the Capital Streaming Rules will apply where shareholders are being provided capital benefits in substitution for dividends. The Capital Streaming Rules will apply if:

a) There is a scheme under which a person is provided with a capital benefit by the company;
b) Under the scheme a taxpayer, who may or may not be the person provided with the capital benefit, obtains a tax benefit; and
c) Having regard to the relevant circumstances of the scheme, it would be concluded that the person, or one of the persons, who entered into or carried out the scheme or any part of the scheme did so for a purpose (whether or not the dominant purpose but not including an incidental purpose) of enabling a taxpayer to obtain a tax benefit.

Whilst there is always a risk that the Commissioner could apply the Capital Streaming Rules and deem the Capital Reduction to be a dividend for income tax purposes, there are mitigating factors to suggest that it is reasonably arguable that the Commissioner should not apply the Capital Streaming Rules to the proposed Capital Reduction. These mitiaating factors include:

The proposed distribution is not attributable to the realised or unrealised profits of Cape Lambert (or its associates).
Cape Lambert is of the view that the proposed restructure of the Cape Lambert group was not entered into for a more than incidental purpose of enabling the shareholders to obtain a tax benefit
The sole reason for the proposed restructure was to aive to effect to the creation of new company which will operate the gold exploration and extraction businesses, and through the restructure, deliver greater value to the existing shareholders of Cape Lambert.

$3.13$ Lodgement with the Australian Securities and Investments Commission

The Company has lodged with the ASIC a copy of this Notice and the Explanatory Statement in accordance with Section 256C(5) of the Corporations Act. $\mathbb{F}$ Resolution 4 is passed the reduction of capital will take effect in accordance with the timetable set out in Appendix 7A of the ASX Listing Rules.

Event	Date
The Company advises ASX that Shareholder approval for the capital reduction has been obtained	Ω
Trading in Shares starts on an "ex return of capital basis"	+ 1 day
Record Date	$+5$ days
First day for the Company to send notice to each security holder and to issue new certificates	$+ 6$ days
Despatch date and last day for the Company to send notice to each security holder. Deferred settlement trading ends.	$+10 \text{ days}$

A summary of the timetable in Appendix 7A is set out below:

Note 1: This is conditional on receiving approval to list on ASX.

$3.14$ Other Material Information

There is no information material to the making of a decision by a Shareholder in the Company whether or not to approve Resolution 4 (being information that is known to any of the Directors and which has not been previously disclosed to Shareholders in the Company) other than as disclosed in this Explanatory Statement and all relevant annexures.

The information in this Notice that relates to Exploration Results, Mineral Resources or Ore Reserves is respect to the Cape Lambert Iron Ore Project is based on information compiled by Martin Reynolds, who is a Fellow of the Australasia Institute of Mining and Metalluray. Mr Reynolds is a Director of Mackay & Schnellmann Pty Ltd, an independent geological consultant and has sufficient experience which is relevant to the style of mineralisation and the type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr Reynolds consents to the inclusion in this Notice of the matters based on his information in the form and context in which is appears.

The information in this Notice that relates to Exploration Results, Mineral Resources or Ore Reserves in respect to the Mt Ida Project is based on information compiled by Robert Annett, who is a Member of the Australasia Institute of Mining and Metallurgy and the Australian Institute of Geoscientists. Robert Annett is a consultant of the Company and has sufficient experience which is relevant to the style of mineralisation and the type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Robert Annett consents to the inclusion in this Notice of the matters based on his information in the form and context in which is appears,

GLOSSARY

ASIC means the Australian Securities and Investments Commission.

ASX means Australian Stock Exchange Limited.

Listing Rules or ASX Listing Rules means the Listing Rules of ASX.

Board means the current board of directors of the Company.

Capital Raising means the proposed capital raising by IGL of 20,000,000 IGL Shares at an issue price of \$0.20 each to raise \$4,000,000.

CGT means Capital Gains Tax.

Company and Cape Lambert means Cape Lambert Iron Ore Limited (ABN 71 095 047 920).

Constitution means the Company's constitution.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the current directors of the Company.

Explanatory Statement means the Explanatory Statement to the Explanatory Statement.

General Meeting means the meeting convened by the Notice.

Gold Assets means the Mt Ida Project, Evanston Project, St Ives Project, Telfer Project, Cardinia Project, Sophie Downs Project, Jacksons Project, British Hills Project, Clampton Project, Bullabulling Project, Lord Byron Project, Bali High Project, Mount Dimer Project and Mt Macmahon Project (in which the Company has an interest) more particularly described in Section 3.9.2, and includes the permitted encumbrance over the Mt Ida project summarised in Section 3.9.2.

Explanatory Statement means the explanatory statement accompanying the Notice.

IGL means International Goldfields Limited.

IGL Option means an option to acquire an IGL Share.

IGL Share means a share in the capital of IGL.

MRA means Mines and Resources Pty Ltd.

Notice means the notice of meeting which forms part of this Explanatory Statement.

Official List means the official list of ASX.

Option means an option to acquire a Share in the Company.

Prospectus means the prospectus to be issued by IGL for the Capital Raising.

Resolutions means the resolutions set out in the Notice, or any one of them, as the context requires.

Share means a fully paid ordinary share in the capital of the Company.

Shareholder means a holder of a Share.

WST means Western Standard Time, Perth, Western Australia.

APPENDIX A

Unaudited Statement of Financial Position - IGL

	Unaudited 31 Jan 2006	Unaudited Pro-forma 31 Jan 2006
	\$	S.
Current Assets
Cash assets		3,600,001

Non Current Assets
Exploration and evaluation assets		7,000,000

Total Assets		10,600,001
Current Liabilities
Payables
Total Liabilities

Net Assets		10,600,001
Total Equity		10,600,001

The unaudited pro-forma statement of financial position of IGL following completion of the transaction and Capital Raising has been prepared to show the financial effects on the Company as at 31 January 2006 of the following transactions:

the acquisition of the Gold Assets from Cape Lambert in consideration for the issue $(\alpha)$ of 35 million IGL Shares at 20 cents per IGL share;
$(b)$ the issue of 20 million fully paid ordinary shares in IGL at 20 cents per IGL Share, thereby raising \$4 million pursuant to the Prospectus; and
the payment of expenses related to the preparation of the Prospectus amounting $(C)$ to approximately \$400,000 which is netted off against the share capital raised.

APPENDIX B

Cape Lambert

Unaudited Pro-forma Statement Financial Position

Consolidated	Audited 30 Jun 2005	Unaudited 31 Dec 2005	Unaudited Pro-forma 31 Dec 2005 Prior to capital reduction	Unaudited Pro-forma 31 Dec 2005 Post capital reduction
	\$000	\$000	\$000	\$000
Current Assets
Cash assets	1,055	10,741	10,741	10,741
Receivables and other	134	10,107	10,107	10,107
	1,189	20,848	20,848	20,848
Non Current Assets
Receivables	4	41	4	[4]
Other financial assets	1,551	2,884	9,884	4,284
Intangible assets		31,315	31,315	31,315
Plant and equipment	149	152	152	152
evaluation Exploration, and development expenditure	23,810	23,806	5,091	5,091
	25,651	58,299	46,584	40,984
Total Assets	26,840	79,147	67,432	61,832
Current Liabilities
Payables	(376)	(9,032)	(9,032)	(9,032)
Provisions	(40)
Total Liabilities	(416)	(9,032)	(9,032)	(9,032)
Net Assets	26,425	70,115	58,400	52,800
Total Equity	26,425	70,115	54,400	52,800

The consolidated unaudited pro-forma statement of financial position of Cape Lambert prior to the capital reduction has been prepared to show the financial effects on the Company as at 31 December 2005 of the following transactions:

$(a)$ the disposal of the Gold Assets to IGL. The Company has not recognised the value of the permitted encumbrance (outlined in Section 3.9.2) as a reliable estimate of the value of this asset can not currently be made; and
$(b)$ the consideration received by Cape Lambert from IGL being 35,000,000 IGL Shares at a deemed issue price of 20 cents per Share.

The consolidated unaudited pro-forma statement of financial position of Cape Lambert post capital reduction has been prepared to show the financial effects on the Company as at 31 December 2005 of the in specie distribution of approximately 28,000,004 IGL Shares at 20 cents per IGL Share to Cape Lambert Shareholders pursuant to the Capital Reduction.

PROXY FORM

APPOINTMENT OF PROXY CAPE LAMBERT IRON ORE LIMITED ABN 71 095 047 920

I/We

being a Member of Cape Lambert fron Ore Limited entitled to attend and vote at the Meeting, hereby

Appoint

Contract

Name of proxy

or failing the person so named or, if no person is named, the Chairman of the Meeting or the Chairman's nominee, to vote in accordance with the following directions or, if no directions have been given, as the proxy sees fit at the General Meeting to be held at 10.00am on 27 March 2006 at Celtic Club, 48 Ord Street, West Perth, Western Australia and at any adjournment thereof. If no directions are given, the Chairman will vote in favour of all of the resolutions.

Votina on Business of the General Meetina

Resolution 1	Election of Mr Del Fante
Resolution 2.	Election of Mr Maher
Resolution 3	Amendment to Constitution
Resolution 4	Equal Reduction of Capital

FOR	AGAINST	ABSTAIN

In relation to the Resolutions, if the Chairman is to be your proxy and you do not wish to direct your proxy how to vote on this/these Resolutions, please place a mark in this box

By marking this box, you acknowledge that the Chairman of the meeting may exercise your proxy even if he has an interest in the outcome of the Resolutions and votes cast by him other than as proxy holder will be disregarded because of that interest. If you do not mark this box, and you have not directed your proxy how to vote, the Chairman of the meeting will not cast your votes on the Resolutions and your votes will not be counted in computing the required majority if a poll is called on the Resolutions. The Chairman intends to vote in favour of the Resolutions.

IF THE CHAIRMAN IS TO BE YOUR PROXY IN RELATION TO THE RESOLUTIONS YOU MUST EITHER MARK THE BOXES DIRECTING YOUR PROXY HOW TO VOTE OR MARK THE BOX INDICATING THAT YOU DO NOT WISH TO DIRECT YOUR PROXY HOW TO VOTE. OTHERWISE THIS APPOINTMENT OF PROXY IN RELATION TO THE RESOLUTIONS WILL BE DISREGARDED.

If you mark the abstain box for a particular item, you are directing your proxy not to vote on that item on a show of hands or on a poll and that your shares are not to be counted in computing the required majority on a poll.

$\sim$ $\sim$ $\sim$

If two proxies are being appointed, the proportion of voting rights this proxy represents is

signed this	ZUU6.
By:
Individuals and joint holders	(affix Companies seal common appropriate)	if
Signature	Director
Signature	Director/Company Secretary
Signature	Sole Director and Sole Company Secretary

CAPE LAMBERT IRON ORE LIMITED ABN 71 095 047 920

Instructions for Completing 'Appointment of Proxy' Form

$\mathbf{L}$ A member entitled to attend and vote at a Meeting is entitled to appoint not more than two proxies to attend and vote on their behalf. Where more than one proxy is appointed, such proxy must be allocated a proportion of the member's voting rights. If the shareholder appoints two proxies and the appointment does not specify this proportion, each proxy may exercise half the votes.
$\overline{2}$ . A duly appointed proxy need not be a member of the Company. In the case of joint holders, all must sian.
1. Corporate shareholders should comply with the execution requirements set out on the proxy form or otherwise with the provisions of Section 127 of the Corporations Act. Section 127 of the Corporations Act provides that a company may execute a document without using its common seal if the document is signed by:
directors of the company: $\bullet$
a director and a company secretary of the company; or
for a proprietary company that has a sole director who is also the sole company secretary - that director.

For the Company to rely on the assumptions set out in Section 129(5) and (6) of the Corporations Act, a document must appear to have been executed in accordance with Section 127(1) or (2). This effectively means that the status of the persons signing the document or witnessing the affixing of the seal must be set out and conform to the requirements of Section 127(1) or (2) as applicable. $\ln$ particular, a person who witnesses the affixing of a common seal and who is the sole director and sole company secretary of the company must state that next to his or her signature.

Completion of a proxy form will not prevent individual shareholders from attending 4. the meeting in person if they wish. Where a shareholder completes and lodges a valid proxy form and attends the meeting in person, then the proxy's authority to speak and vote for that shareholder is suspended while the shareholder is present at the meeting
1. Where a proxy form or form of appointment of corporate representative is lodged and is executed under power of attorney, the power of attorney must be lodged in like manner as this proxy.
To vote by proxy, please complete and sign the proxy form enclosed and: 6.
$(C)$ send the proxy form by post to Cape Lambert Iron Ore Limited, 18 Oxford Close, Leederville, Western Australia, 6007; or
$(a)$ send the proxy form by facsimile to the Company on facsimile number (08) 9380 9666 (International + 61 8 9380 9666),

so that it is received not later than 10.00am (WST) on 25 March 2006.

AI assistant

IRON BEAR RESOURCES LTD — Proxy Solicitation & Information Statement 2006

65091_rns_2006-02-23_9ef3dfc2-e66c-49ba-b916-1367f7d6bc8d.pdf

CAPE LAMBERT IRON ORE LIMITED ABN 71 095 047 920

NOTICE OF GENERAL MEETING

CONTENTS PAGE

TIME AND PLACE OF MEETING AND HOW TO VOTE

VENUE

YOUR VOTE IS IMPORTANT

VOTING IN PERSON

VOTING BY PROXY

Proxy forms received later than this time will be invalid.

NOTICE OF GENERAL MEETING

AGENDA

$\mathbf{1}$ . RESOLUTION 1 - ELECTION OF MR EMILIO DEL FANTE

$21$ RESOLUTION 2 - ELECTION OF MR BRIAN MAHER

$\mathbf{3}$ . RESOLUTION 3 - AMENDMENT TO CONSTITUTION

RESOLUTION 4 - APPROVAL FOR AN EQUAL REDUCTION OF CAPITAL $\overline{\mathbf{4}}$ .

DATED: 24 FEBRUARY 2006

Voting Exclusion Note:

EXPLANATORY STATEMENT

$\mathbf{1}$ . RESOLUTIONS 1 AND 2 - ELECTION OF DIRECTORS

Emilio Del Fante

Brian Maher

$\overline{2}$ RESOLUTION 3 - AMENDMENT TO CONSTITUTION

$\overline{\mathbf{3}}$ . RESOLUTION 4 - REDUCTION OF CAPITAL

$3.1$ Background and Overview of the Proposal

$3.2$ Effect of Proposed Equal Capital Reduction on the Company

$3.3$ Effect of Proposed Equal Reduction on Shareholders in the Company

$3.4$ Advantages and Disadvantages of the Proposal

Advantages $(a)$

Disadvantages $(b)$

$3.5$ Additional Important Information for Shareholders

$3.6$ Overseas Shareholders

$3.7$ Details of the Resolution

ASX Listing Rule 11.4

Section 256C of the Corporations Act

Directors' Interests and Recommendations $3.8$

$3.9$ Information on IGL

$3.9.1$ Background

$3.9.2$ Details of the Gold Assets to be transferred by Cape Lambert to IGL

Mt Ida Project

Evanston Project

St Ives Project

Telfer Project

Cardinia Project

Sophie Downs Project

Jackson Project

British Hill Project

Clampton Project

Bullabullina Project

Lord Byron Project

Bali High Project

Mount Dimer Project

MI Macmahon Project

$3.9.3$ IGL Board

Mr Tony Sage -Executive Chairman (B.Com, FCPA, CA, FTIA)

Mr Nap Mayer - Non-Executive Director (B.Eng (Mining), Dip Bus Admin)

Mr Charles Mostert - Non-Executive Director (B.Com (Hons), MBL, Certificate in Mining Taxation)

Mr Tim Turner - Non Executive Director (B.Bus. FCPA. FTIA)

$3.9.4$ Information concerning IGL Shares

Voting Rights

Rights on Winding Up

Transfer of Shares

Future Increases in Capital

Variation of Rights

Dividend Rights

$3.10$ Risk factors

Exploration Success

Development and Operating Risks

Reserves and Resource Estimates

Commodity Price Volatility and Exchange Rate Risks

Environmental Risks

Native Title and Title Risks

Joint Venture Parties, Agents and Contractors

Share Market Conditions and Security Investment

Competition

Economic Risks

Insurance

Reliance on Key Personnel

IRON BEAR RESOURCES LTD Proxy Solicitation & Information Statement 2006

$2₁$ RESOLUTION 2 - ELECTION OF MR BRIAN MAHER